Is Deforestation the Legacy of Transmigration? Anna Lou Abatayo∗ Department of Food and Resource Economics Center for Macroecology, Evolution and Climate University of Copenhagen May 30, 2016 Abstract Although it is widely believed that the Indonesian Transmigration Program, the world’s largest government-sponsored voluntary migration program, caused significant deforestation in the outer islands of Indonesia, to date, there has been no empirical evidence to support such claims. This paper examines both the short- and long-run effects of transmigration on deforestation using archival data, Landsat and MODIS satellite images, and a program evaluation approach. I find that an additional transmigrant family causes an initial 3.4 km2 of forest cover loss but has minimal impact in the long-run. The main mechanisms responsible for the increased deforestation appear to be the disruption of local social cohesion and the heightened perception of property rights insecurity. Using estimates of wood production and legal logging, I also find that the presence of transmigrants is correlated with illegal logging. Keywords: Deforestation, Migration, Social Cohesion, Property Rights JEL Classification: Q23, O15, J15 ∗ Email: [email protected] 1 1 Introduction The Indonesian Transmigration Program is one of the world’s largest governmentsponsored voluntary migration programs. Before its decline in 1998, it succeeded in migrating over 4 million individuals from the fertile but densely populated inner islands of Indonesia to the sparsely populated but heavily forested outer islands of the country.1 The program was started in 1905, by the Dutch colonial government, halted during the Japanese occupation, and revived during the presidencies of Sukarno and Suharto.2 At its height, the program migrated over 2 million individuals within 4 years, and its source of funding extended to international organizations such as the World Bank and the Asian Development Bank. It was also during this time that the program became controversial, in part due to its effect on deforestation (World Bank 1990; Food and Agriculture Organization of the United Nations 1990; Dick 1991; Dauvergne 1993). The most cited work examining the effects of transmigration on deforestation is an article by Dick (1991). He conjectures that the effect of transmigration on deforestation must have been 0.02 - 0.03 km2 of forested area per transmigrant family: 0.02 km2 as settlement for the family (this was the amount of land the government gave to each family) and an assumed 0.01 km2 per family for infrastructure support. To the best of my knowledge, there has been no attempt to empirically estimate 1 The inner islands are composed of the islands of Java, Bali and Madura while the outer islands are composed of the islands of Sumatra, Kalimantan, Sulawesi, Maluku and West Papua. The goals of the program were two-fold: (1) to decrease population pressure in the inner islands and (2) to increase the country’s agricultural productivity. 2 Sukarno was president of Indonesia from 1945-1967. Suharto was president of Indonesia from 1967-1998. 2 whether transmigration actually caused widespread deforestation in Indonesia. This paper examines both the short- and long-run effects of transmigration on deforestation using archival data, Landsat and MODIS satellite images, and a program evaluation approach. I show a robust correlation between transmigration and deforestation both in the short- and long-run. The main mechanisms responsible for the increased deforestation appear to be the disruption of local social cohesion and the heightened perception of property rights insecurity. Using estimates of wood production and legal logging, I also find that the presence of transmigrants is correlated with illegal logging. The rest of the paper is structured as follows. Section 2 gives a brief background on Indonesia and its Transmigration Program. The data is presented in Section 3 and the empirical approach and results in Section 4. I conclude in Section 5. 2 Background The Transmigration Program reached its zenith during Suharto’s presidency, and although the program continues to exist at present, the amount of money set aside for the program and the number of individuals migrated has significantly declined. Nevertheless, the link with deforestation remains a topic of ongoing debate. The impact of the program is important because not only does Indonesia have one of the world’s largest forest cover areas, most of which are found in the outer islands, it also has one of the world’s highest deforestation rates (Margono et al. 2014). In fact, since the 1990s, over 280,000 km2 of forest has been lost (Mongabay 2007), resulting 3 in loss of livelihood, mass extinction of species, and steadily increasing greenhouse gas (GHG) emissions.3 The effect of the program on deforestation continues to be downplayed. Many claimed that deforestation during Suharto’s presidency was not caused by the program. Rather, deforestation was caused by locals and their traditional farming techniques. Whitten (1987), in particular, claims that not all lands cleared to make room for transmigrant settlements were forest land; many were degraded land or conversion forests, and as such, would have been converted anyways even if transmigration never happened. Still, he concedes, especially since “[transmigrant] settlers are no lovers of forests...[and] are quite happy to see [the forests] felled” (Whitten 1987, p. 243), that if transmigration led to deforestation, the effect would be very small, possibly just around 1% of total forest cover loss. There were also those who defended the locals (Cramb 1988; Repetto 1990; Angelsen 1995). Angelsen (1995), in particular, finds that the effect of local farming on deforestation has been “put out of proportion” [p. 1713]. The World Bank (1990) and Food and Agriculture Organization of the United Nations (1990) go a step further and directly blame the Transmigration Program for deforestation. They estimate the program to have caused 2,500 to 3,000 km2 of forest cover loss every year. Assuming that approximately 100,000 families were transmigrated every year, these estimates coincide with Dick (1991)’s estimate of a forest cover lost of 0.03 km2 for each settled transmigrant family. 3 Of Indonesia’s total emissions of 3,014 metric tons of carbon dioxide equivalent (MTCO2e), 85% is due to forest clearing and forest fires (United States Environmental Protection Agency 2008). 4 The Transmigration Program has been described as a bureaucratic mess, including by those in charge of the program (Cooney 2000). Not only was the program characterized by conflicts between locals and transmigrants (Fearnside 1997; Adhikari 2003), it was extremely disorganized. Coordination between offices in the outer islands, who were examining land eligibility, and offices in the inner islands, who were approving settlement locations, rarely occurred. Continuity was also a problem. Between 1947 and 1966, for example, the ministry and department responsible for transmigration changed ten times: from Manpower to Labor and Social Welfare to Development and Youth to Home Affairs to Agrarian Affairs to Co-operatives, back to Manpower and so forth. There were several guidelines on how to pick transmigrants and their settlements. Many of these guidelines, however, were largely ignored and many settlement inspections were done haphazardly. In fact, while one would expect transmigrant settlements to be chosen based on land quality, given that one of the program’s goals is to increase the country’s agricultural productivity, many chosen settlement lands were not suited to the kind of wet rice agriculture that migrants from the inner islands are familiar with (Hardjono 1988). Tidal irrigation, as a method of bringing fresh water to the rice fields using the tides, failed miserably. Crops died, and many settlements could not survive without government support. When, after 3-5 years, government support was withdrawn from these settlements, many agriculture plots were abandoned and transmigrants took up other livelihoods. The proposed and actual number of individuals transmigrated coincided with highs and lows of economic and political events in Indonesia. Figure 1 shows a time- 5 line of economic and political events (bottom part of the timeline) vis-á-vis transmigration events (top part of the timeline). The height of the Transmigration Program occurred during Suharto’s presidency, between late 1980s to early 1990s. During this time, the goals and actual number of transmigrants migrated were at its highest (see Table 1). Oil booms in 1973-1974 and 1979-1980 as well as external assistance from the World Bank, the International Development Authority, UN specialized agencies and bilateral donors increased the scale of transmigration. A decline in world oil prices in 1987 and the 1997 Asian Financial Crisis did the opposite. In fact, when Suharto resigned from presidency after the Asian Financial Crisis, the scale of the Transmigration Program severely decreased. Figure 1: Timeline of Indonesian Events 6 Table 1: Transmigration Figures, 1950-2000* Program Year Goal Actual Pre-Repelita 1950-51 to 1969-70 Repelita I 1969-70 to 1974-75 Repelita II 1974-75 to 1978-79 Repelita III 1978-79 to 1983-84 Repelita IV 1984-85 to 1989-90 Repelita V 1989-90 to 1993-94 Repelita VI 1993-94 to 1999-00 38,141 families 250,000 families 1 million individuals 500,000 families 2 million individuals 750,000 families 3.75 million individuals 550,000 families 2.5 million individuals 600,000 families - 100,000 families 36,483 families 182,414 individuals 118,000 families 544,688 individuals 535,000 families 2,469,560 individuals 230,000 families 1,061,680 individuals n/a n/a ≤300,000 families ≤1.5 million individuals Notes: During Suharto’s presidency, transmigration was done in repelitas of Five-Year Development Plans. Actual families and individuals moved were taken from Adhiati and Bobsien (2001) 7 Suharto’s resignation not only virtually halted the Transmigration Program, it also brought about a massive decentralization in Indonesia. Forest management, no longer the direct responsibility of the national government, was now delegated to districts. Indigenous people saw this as an opportunity to assert their adat 4 land rights while miners and oil palm plantation businesses saw this as an opportunity to cajole the bupati 5 to issue permits to destroy forests and convert them into mines or plantations. These issues of forest property rights have significant and direct impacts on forest conservation (Bohn and Deacon 2000; Sunderlin et al. 2014) Present deforestation in the country has been attributed to decentralization (Burgess et al. 2012), ethnic fragmentation (Alesina et al. 1999) leading to less social cohesion (Ostrom et al. 1999; Katz 2000) and less local authority (Persha et al. 2011; Luttrell et al. 2014), forest fires (Frankenberg et al. 2005), oil palm plantations (Koh and Wilcove 2008), and mining activities (McMahon et al. 2000). Outside Indonesia, deforestation has been shown to be highly correlated with migration (Browder 1995; Naylor et al. 2002), population growth (Bilsborrow and Ogendo 1992), the presence of roads and land quality (Pfaff 1999), and economic development and inequality (Koop and Tole 2001). I use these to control for determinants of deforestation other than transmigration. 4 Adat are customary or indigenous laws. A bupati is the head of a kabupaten. A kabupaten is a regency, a second-level administrative subdivision in Indonesia. 5 8 3 Data To test whether transmigration led to deforestation in the outer islands, I use several measures of deforestation and transmigration. Since disagreements on the determinants of deforestation in Indonesia stem mainly from the lack of appropriate and primary data on the rate of forest cover change (Sunderlin and Resosudarmo 1996; Romijn et al. 2013), I use four measures of deforestation, of which two come from the interpretation of satellite images. I also use four different measures of transmigration: two on a family level and two on an individual level. The dataset on deforestation comes from Landsat satellite images, MODIS satellite images, and wood production volume and price, while the dataset on transmigrant families and individuals comes the Indonesian Ministry of Manpower and Transmigration and collated from the Indonesian Statistical Yearbooks and Pocketbooks. To control for other determinants of deforestation in a cross-section setting, I include measures of standing forest, district splits, roads, oil palm plantations, mining, poverty, income, gender, soil quality and tidal irrigation. Using either Landsat or MODIS satellite images has its own advantages and disadvantages. Landsat goes as far back as 1972, although images before 2000 in the U.S. Geological Survey is sparse. Missing images, hence, missing districts and years, make it hard to obtain a good measure of deforestation before the 21st century. Moreover, although Landsat images have finer resolutions than MODIS images6 many Landsat images are laden with clouds and cloud shadows, making it hard to 6 A pixel is equivalent to 30-60 square meters in Landsat while a pixel is equivalent to 250 square meters in MODIS. 9 distinguish these from deforestation. MODIS satellite images, on the other hand, provide cloudless images but is only available starting 2000. This paper uses both datasets. The Landsat dataset provides a measure of deforestation in the short-run while the MODIS dataset provides a measure of deforestation in the long-run. Table 2 shows the summary statistics for all four measures of deforestation, and a more detailed description for each measure is discussed below. Table 2: Deforestation Summary Statistics Variable Category Obs. Landsat (km ) Province 31 MODIS (m2 ) Conversion Conservation Production Protection Others Wood Volume (m3 ) Wood Price (U S$) District District District District District District Province Province 9352 1184 1520 2096 2152 2400 239 239 2 Years Mean 1994, 1997, 10874.36 and 1998 2001-2008 33719.2 2001-2008 44107.9 2001-2008 11541.61 2001-2008 67615.7 2001-2008 7667.867 2001-2008 36396.35 1994-2007 800976 1994-2007 649.56 Std. Dev. Min. Max. 11709.61 0 39045.36 131402.3 123167.4 64278.08 214001.8 30780.58 119909.8 1106679 527.19 0 0 0 0 0 0 6571 0 3691000 1355500 1471000 3691000 1000500 2363500 5606388 123452 Notes: The MODIS dataset has deforestation data for 311 districts from 2001 to 2008. There are 9352 observations in MODIS in total because deforestation in the dataset has also been divided into forest zones. The sum of district deforestation in all forest zones (conversion, conservation, production, protection, and others) equal total district deforestation. Wood volume and price in the original dataset has 3082 observations, with type of wood per province per year as a unit of observation. For this paper’s purposes, the sum of wood volume and price for all types of wood per province per year is used. Wood prices have been converted in 2000 USD. 1. Landsat Satellite Images: Interpreted dataset from Landsat satellite images comes from the Indonesian Ministry of Forestry’s “Forest Statistics: Division of Forest Inventory and Land Use” (Statistik Kehutanan: Bidang Inventarisasi Dan Tata Guna Hutan). Data is available for the years 1986, 1994, 1997 and 1998, and contains the area that did not have cloud cover and hence, was 10 successfully interpreted. This area is divided into either forested area or nonforested area for each province, with maximum deforestation occurring at South Sumatra in 1986. 2. MODIS Satellite Images: Another measure of deforestation is the number of forested pixels lost using MODIS satellite images. Deforestation is in terms of forested pixels lost per Indonesian district from 2001 to 2008. This dataset presents deforestation numbers for 311 districts7 . These 311 districts are divided into five categories of forest zones: (1) conversion forests, (2) conservation forests, (3) production forests, (4) protection forests, and (5) forests for other uses.8 Dropping the “forest for other uses” category, 300 districts remain, with 148 districts under conversion forests, 190 districts under conservation forests, 262 districts under production forests, and 269 districts under protection forests. Appendix A provides a summary of the number of districts for each forest zone in each province. On average, Indonesia has lost 33,720 square meters of forest from 2001 to 2008, with a standard deviation of 7 There are no deforestation numbers for all districts in the inner islands and some transmigration villages were not matched to deforestation districts in Riau Island and the Moluccas. Moreover, although Indonesia differentiates between cities and districts (both are considered second-level administrative subdivisions), in this paper, cities are counted as a separate district and I do not differentiate between a city and a district. 8 Forest zones are areas designated by the Ministry of Forestry in accordance with The Forestry Law (No. 14/1999) and the Basic Forestry Law (No. 5/1967). Production and conversion zones are those in which legal logging is allowed and negotiations take place between logging companies and community representatives. While production zones are devoted to the extraction of timber subjected to the granting of a logging permit, in conversion zones authorized companies can clearcut the forest to set up plantations for industrial timber, oil palm and other estate crops (Barr et al. 2006; Alesina et al. 2014). 11 131,402 square meters. Deforestation at 3,691,000 square meters is highest at East Kotawaringin, Central Kalimantan in 2006. 3. Wood Production Volume and Price: Wood production volume and price from 1994-2007 is also used as a measure of deforestation. These statistics are collated from the annual “Statistics of Forest and Concession Estate” (Statistik Perusahaan Hak Pengusahaan Hutan) published by the Indonesian Central Bureau of Statistics. It contains the quantity and value of logs cut for 19 provinces and the associated provincial price by type of wood for 117 different types of wood. Because the dataset is derived from production, it includes both clear felling as well as selective logging; on the other hand, it captures only logging that was officially reported by the forest concessions, and so likely does not include most illegal logging. This dataset is mainly used as a robustness check, especially since misclassification of pixels is possible when analyzing satellite images9 . Like deforestation, several measures are also used for transmigration depending on the unit measure as well as on how big the administrative divisions are. Table 3 shows the summary statistics for the transmigration measures and below is a more in-depth discussion of these four measures. 1. Village Transmigrant Families and Individuals: The Indonesian Ministry of Manpower and Transmigration (MOTM) provides a roster of ex-transmigration 9 Misclassification is especially possible when using Landsat Satellite images. Images that contain clouds make it hard to analyze whether deforestation or reforestation has happened between years. 12 Table 3: Transmigration Summary Statistics Mean Village T.Families 2,543.00 Village T.Individuals 10,955.76 Provincial T.Families 42,345.14 Provincial T.Individuals 56,043.24 Std. Dev. Min. Max. 5,826.75 25,212.50 41,111.85 86,531.35 0 0 0 0 58,145.00 255,173.00 162,169.00 407,422.00 locations that have become villages or district capitals (Daftar Nama-Nama Eks Lokasi Transmigrasi Yang Telah Menjadi Desa/Ibu Kota Kecamatan). This dataset contains a list of transmigration villages that were successfully transferred to the transmigrants and have since then been able to survive without government support. It also contains the district these villages were in, the placement and transfer dates10 , the number of transmigrant families and individuals placed in a village and the number of transmigrant families and individuals during the village transfer. The earliest placement date is 1952 and the latest is 2006. Fifteen out of the 33 provinces in Indonesia have transmigrant settlements that became villages or district capitals, with West Sumatra having the lowest number of these villages and South Sumatra having the most. Appendix B provides a summary of the number of villages in each province that were successfully transfered from the government to the transmigrants. 2. Provincial Transmigrant Families and Individuals: The Statistical Yearbooks and Pocketbooks of Indonesia also provide transmigration data at a provincial level from 1856-1994. Appendix D summarizes the years for which 10 The regression analysis uses the number of families “transferred” rather than “placed” since the analysis is interested in the transmigrants who settled in the outer islands. 13 transmigration data has been made available in these yearbooks and pocketbooks and in which yearbooks and pocketbooks these data can be found in. Since transmigration declined after Suharto resigned from presidency, the missing years after 1994 should not greatly affect the analysis. Unfortunately, because of the missing years between 1956 to 1994, the total number of transmigrant families and individuals per repelita (see Appendix C) do not match the numbers in Table 1. Furthermore, the number of transmigrant individuals was not made available in the yearbooks and pocketbooks for the years 1988 to 1994. Figures 2a and 3a plot district and provincial deforestation using MODIS from 2001-2008 on a map of Indonesia. Below these deforestation figures are similar plots for the number of transmigrant families and individuals. The district level heat maps are constructed by summing the number of village transmigrant families and individuals (respectively) for all available years while the province level heat maps are constructed by summing the number of provincial transmigrant families and individuals (respectively) for all available years. Since MODIS is on a district level, I use the provincial sum of district deforestation in plotting provincial deforestation. For both heat maps, I find that deforestation is highly correlated with both the number of transmigrant families and individuals. In many districts where the heat map shows high levels of deforestation, there are similarly high levels of transmigrant families and individuals. As for the control variables, an extensive review of related literature shows that the following should be controlled for: standing forest, decentralization, roads, min14 (a) District Deforestation (b) Number of Families Transmigrated (c) Number of Individuals Transmigrated Figure 2: MODIS Deforestation and Village T.Families and T.Individuals 15 (a) Provincial Deforestation (b) Number of Families Transmigrated (c) Number of Individuals Transmigrated Figure 3: MODIS Deforestation and Provincial T.Families and T.Individuals 16 ing and oil palm plantations, economic development and inequality, gender, soil quality and tidal irrigation. Table 4 lists these control variables in alphabetical order, their descriptions, the year used, and where they are from. Table 4: Control Variables Code Variable Name Area District Land Area Provincial Land Area DSplits District Splits Forest Forest Area Gender Gender Income Income Mining Mining Plantations Oil Palm Plantations Pop Rural Population Provincial Population Poverty Poverty Roads Roads Soil Soil quality Tidal Tidal Irrigation Variable Description Level Year Source Total area in square meters Total area in square meters Average district splits Average standing forest Percentage of males Regional GDP Individuals in the mining sector Total area of oil palm plantation Population in the rural areas Population in the province Individuals below the poverty line Length of roads: asphalt, dirt, gravel Soil quality: low, medium, high 1 if inland and 0 otherwise District Province District District Province Province District District District Province District District District District 2000 2000 2001-2008 2000 2009 2004 2007 2000 2000 2000 1999 2001 1993 N/A WB BPS Burgess MODIS BPS BPS WB WB WB BPS WB WB USDA N/A Notes: WB stands for the World Bank, BPS stands for the Indonesian Bureau of Statistic (Badan Busat Statistik ), Burgess stands for Burgess et al. (2012), MOTM stands for the Indonesian Ministry of Manpower and Transmigration, and USDA stands for United States Department of Agriculture. 4 4.1 Results Short Run Effects To examine the effect of transmigration in the short run, I begin by estimating the following equation: DEFi,t = α + βT RAN Si,t−1 + F Ej + i,t 17 (1) where DEFi,t is deforestation in square kilometers in province i in island j at time t, T RAN Si,t−1 is the number of transmigrants moved to province i at time t − 1, F Ej are island fixed effects, and is the error term. Since I have forest covers for 1986, 1994, 1997 and 1998 from Landsat satellite images, I am able to compute deforestation for 1994, 1997 and 1998. Table 5 reports the results for provinces in the outer islands that underwent deforestation. Linear regressions using the data on village transmigration show that an additional transmigrant individual leads to 0.7 km2 of forest cover loss in a year while an additional transmigrant family leads to 3.42 km2 of forest cover loss. Although still statistically significant, these effects decrease with island fixed effects. Linear regressions using data on provincial transmigrant families report a smaller magnitude that becomes smaller with island fixed effects: an additional transmigrant family leads to 0.88 km2 of forest cover loss without fixed effects and 0.70 km2 of forest cover loss with island fixed effects. Unfortunately, the data on provincial transmigrant individuals do not have sufficient observations to do a similar regression. As for the log specification, results are significant and positive. But instead of having a decresing magnitude when fixed effects are included, magnitudes increase for village transmigrant family, village transmigrant individual, and provincial transmigrant family. 18 Table 5: Short Run Panel Regression Results Dependent Variable: Deforestation in 1994, 1997 and 1998 (km2 ) (1) T.Fam Constant R-squared N Province FE Island FE 3.4248** (0.6293) 9231.0082 (3949.4688 0.10 31 no no (7) T.Ind Constant R-squared N Province FE Island FE 0.7028** (0.1410) 9,379.1949* (3937.7596) 0.09 31 no no (13) T.Fam Constant R-squared N Province FE Island FE 0.8795*** (0.1082) 7372.2831 (3307.3544) 0.25 31 no no Village Transmigrant Families Linear Regression Log Regression (2) (3) (4) (5) 2.0455 (3.2836) 9,892.8623*** (1575.6146) 0.60 31 yes no 2.9005*** (0.2945) 9,482.5975*** (141.3223) 0.32 31 no yes 0.2989* (0.1237) 19.2037*** (1.0033) 0.02 31 no no 0.7545** (0.1403) 17.9732*** (0.3790) 0.37 31 yes no Village Transmigrant Individuals Linear Regression Log Regression (8) (9) (10) (11) 0.3398 (0.6931) 10,151.4880*** (1474.4090) 0.59 31 yes no 0.5506*** (0.0840) 9,702.9392*** (177.1152) 0.3 31 no yes 0.2057 (0.1563) 19.3757*** (0.7848) 0.02 31 no no 0.6666*** (0.0572) 17.9521*** (0.1767) 0.37 31 yes no Provincial Transmigrant Families Linear Regression Log Regression (14) (15) (16) (17) 0.5689 (0.5154) 8,609.1434** (2052.1196) 0.64 31 yes no 0.7034*** (0.0603) 8,073.6184*** (240.1868) 0.4 31 no yes 0.6710** (0.176) 17.5313*** (1.6029) 0.2 31 no no 0.7781* (0.2469) 17.1354*** (0.9125) 0.49 31 yes no (6) 0.3928** (0.0814) 18.9502*** (0.2198) 0.11 31 no yes (12) 0.2457 (0.1349) 19.2522*** (0.4167) 0.09 31 no yes (18) 0.7192** (0.1744) 17.3530*** (0.6445) 0.27 31 no yes *** p < 0.01, ** p < 0.05, * p < 0.10 Notes: Robust standard errors, clustered at the island level in parentheses. “T.Fam” stands for transmigrant family. “T.Ind” stands for transmigrant individual. Since deforestation is at the province level, the number of village transmigrants per year within a province were summed up. 19 Since height of transmigration happened before the 1990s, I also estimate the short run effect of transmigration at its height by estimating the following equation for deforestation between 1986 and 1994: DEFi,1994 = α + βT RAN Si,1986 + i,1994 (2) Using the data on village transmigrant families and individuals, results show that an additional transmigrant individual leads to 0.32 km2 of forest cover loss while an additional transmigrant family leads to 1.37 km2 of forest cover loss (see Table 6). However, although still positive, coefficients in the log specification are no longer statistically significant. Positive results from the linear model could possibly be due to outliers. Hence, I ran robust linear regressions to check if this is the case. With robust regressions, coefficients continue to be statistically significant, with slightly higher magnitudes compared to the coefficients in the standard linear regressions. Interestingly, doing the same kind of analysis but running it using data on provincial transmigrant families, I find positive and statistically significant effects of an additional transmigrant family on deforestation both in the robust linear and robust log specifications. 20 Table 6: 1994 Cross Section Regression Results Dependent Variable: Deforestation (Def1994 , km2 ) Standard Regressions Linear Regression Log Regression Village Transmigrants Provincial Transmigrants Village Transmigrants Provincial Transmigrants (1) (2) (3) (4) (5) (6) T.Fam 1.3814* (0.722) 0.3217* (0.1572) Constant 15,607.1227*** 15,544.8946*** (3803.1726) (3690.6275) R-squared 0.09 0.09 N 13 13 0.5338 (0.3551) 0.0436 (0.0368) T.Ind 13,280.3454** (5207.3409) 0.18 13 23.2312*** (0.2346) 0.05 13 0.1772 (0.1465) 3.510 (0.031) 23.2407*** (0.2305) 0.05 13 21.9492*** (1.3511) 0.12 13 Robust Regressions Linear Regression Log Regression Village Transmigrants Provincial Transmigrants Village Transmigrants Provincial Transmigrants (7) (8) (9) (10) (11) (12) T.Fam 1.7845** (0.716) 0.4026** (0.1656) Constant 10,943.6356*** 11,005.3405*** (2203.6253) (2238.0752) R-squared 0.36 0.35 N 13 13 0.7154*** (0.2285) 0.0438 (0.0604) T.Ind 8,705.4343** (2961.4854) 0.47 13 23.2268*** (0.4163) 0.05 13 0.2684* (0.1486) 0.0350 (0.052) 23.2381*** (0.428) 0.04 13 21.0811*** (1.3131) 0.23 13 *** p < 0.01, ** p < 0.05, * p < 0.10 Notes: Robust standard errors in parentheses. Deforestation is computed as the difference in forest cover between 1985 and 1994. “T.Fam” stands for provincial transmigrant family in 1985. 21 4.2 Long Run Effects To analyze long-run effects of transmigration on deforestation, I estimate the following equation: DEFi,j,t = α + β t X T RAN Si,s + P ROVj + Y EARt + i,j,t (3) s=1952 where i is the district, j is the district, the province or the island, and t is the year. DEFi,j,t is deforestation in district i in province or island j at year t; T RAN Si,s is the number of transmigrants moved to district i; P ROVj are district-level, province-level or island-level fixed effects; Y EARt are year fixed effects; and i,j,t is the error term. The long-run analysis makes use of the deforestation numbers from MODIS satellite images. Hence, with MODIS, t goes from 2001 to 2008. The MODIS dataset also allows for the estimation of the relationship between transmigration and deforestation under different forest zones. As for transmigration, although there are four measures of transmigration, the time dimension of the dataset only allows for the use of two measures - the number of transmigrant families and individuals settled in a village. 22 Table 7: Long Run Regression Results Dependent Variable: Deforestation from 2001 to 2008 (m2 ) T.Fam Constant R-squared N*T Year FE District FE Province FE Island FE Village Transmigant Families, 1952 - 2006 Linear Regression Log Regression (1) (2) (3) (4) (5) (6) (7) 16.8500** 16.1471** 11.1674* 15.3682** 0.5056*** 0.3243*** 0.3405*** (7.2008) (7.5454) (5.6361) (6.9707) (0.0646) (0.0626) (0.0491) 74,799.5101*** 0 0 0 6.7235*** 0 0 (21430.8515) (28266.5897) (28015.0495) (15238.3376) (0.4281) (0.3002) (0.2848) 0.08 0.54 0.27 0.16 0.22 0.84 0.64 2799 2799 2799 2799 2799 2799 2799 no yes yes yes no yes yes no yes no no no yes no no no yes no no no yes no no no yes no no no 23 (9) T.Ind Constant R-squared N*T Year FE District FE Province FE Island FE 3.8695** (1.6834) 75,181.5054*** (21692.0005) 0.08 2799 no no no no Village Transmigant Families, 1952 - 2006 Linear Regression Log Regression (10) (11) (12) (13) (14) (15) 3.7071** (1.7646) 0 (28221.37) 0.54 2799 yes yes no no 2.5141* (1.3047) 0 (28048.7519) 0.27 2799 yes no yes no 3.5243** (1.6287) 0 (15215.4262) 0.16 2799 yes no no yes 0.2820*** (0.0506) 0 (0) 0.57 2799 no no no no 0.2802*** (0.0533) 0 (0.3016) 0.84 2799 yes yes no no 0.2915*** (0.0408) 0 (0.2860) 0.64 2799 yes no yes no (8) 0.3526*** (0.0511) 0 (0.2127) 0.6 2799 yes no no yes (16) 0.3004*** (0.0434) 0 (0.2117) 0.6 2799 yes no no yes *** p < 0.01, ** p < 0.05, * p < 0.10 Note: Robust standard individuals, clustered at the province level in parentheses. “T.Fam” stands for transmigrant family and “T.Ind” stands for transmigrant individuals. Table 7 reports the results from running equation 3 in linear and log specifications. One observation represents a district and deforestation is measured in square meters (m2 ). Columns (1), (5), (9), and (13) are results without any fixed effects. The rest have year fixed effects and district, province or island fixed effects. Deforestation is consistently higher in areas with more transmigrants. In the linear regression, an additional transmigrant individual causes 2.51 m2 of forest cover to disappear in a year at very least. Assuming that each transmigrant family is composed of 3-4 members, this effect is less than the marginal forest cover loss due to an additional transmigrant family. Column (3) shows that, at the very least, an additional transmigrant family leads to 11.17 m2 of forest cover loss in a year. Results for log regressions are also consistently positive. However, the coefficients from the log regressions imply a bigger long-run effect of transmigration on deforestation. Given that the mean of deforestation in this specification is 112,662.40 m2 and the mean of transmigrant individuals is 9,686 individuals, 0.2802 in Column (14), the smallest effect among the log regressions, implies that an additional transmigrant individual leads to 3.26 m2 for forest cover loss. Moreover, given that the mean of transmigrant family is 2,257 families, 0.3243 in Column (6) implies that an additional transmigrant family leads to 16.26 m2 of forest cover loss. Using the same dataset, I am also able to estimate the long-run cumulative effect of deforestation by running a cross-section regression of the sum of past transmigration on the sum of present deforestation. Hence, the following estimation model: 2008 X t=2001 DEFi,j,t = α + β 2006 X T RAN Si,t + γCON Tj + i,j t=1952 24 (4) where P2008 t=2001 DEFi,j,t is the sum of deforestation from 2001 to 2008, P2006 t=1952 T RAN Si,t is the sum of transmigration from 1952 to 2006, CON Tj are district-level and provincial-level controls mentioned in Table 4, is the error term, i is the district, and j is either the district. The coefficient of interest is β, and it measures the effect of an additional transmigrant moved between 1952 to 2006 on deforestation between 2001 and 2008. Table 8 report the results from running equation 4. An observation represents a district. For deforestation, it is one district from 2001 to 2008. For transmigration, it is one district from 1952 to 2006. Just like the previous long-run analysis, deforestation is measured in m2 . Results from the linear specification show that an additional transmigrant individual in the past leads to present forest cover loss of 29.66 m2 while an additional transmigrant family in the past leads to present forest cover loss of 129.18 m2 . This result, however, disappears when control variables are added. In the log specification, the effect of an additional transmigrant individual drops from a coefficient of 0.2027 (equivalent to 18.86 m2 ) to 0.1746 (equivalent to 16.24 m2 ) while the effect of an additional transmigrant family drops: the coefficient decreases from 0.2369 (equivalent to 95 m2 ) to 0.2048 (equivalent to 82.12 m2 ).11 The statistical significance of the coefficients for transmigrant individuals and families drop when controls are added but continue to be statistically significant. 11 In this specification, mean deforestation is 1,013,961 m2 , mean number of transmigrant individuals is 10,897.56 individuals in this specification, and mean number of transmigrant families in this specification is 2,528.55 families. 25 Table 8: Cumulative Cross Section Regression Results P 2 Dependent Variable: Deforestation ( 2008 t=2001 DEFt , m ) (1) T.Fam Village Transmigrant Families 1952 - 1979, 1980 - 2006 Linear Regression Log Regression (2) (3) (4) (5) 129.1786*** (47.7025) T.Fam 1 T.Fam 2 NTFam Constant 687,326.8204*** (120934.1702) R-squared 0.14 N 311 Controls no 34.5202 (38.6108) 0.2369*** (0.0244) -103.8669 (73.8917) 103.2229** (51.2593) 40.4475*** (13.6161) -26,991,422.1385** 8770722.9596 11.4816*** (13063568.5114) (20223006.7133) (0.1431) 0.39 0.48 0.22 67 67 308 yes yes no 0.2048** (0.0847) -0.0289 (0.0502) 0.1490* (0.0815) 0.1122 (0.0842) -27.0005* -25.2191 (15.4333) (15.5565) 0.59 0.63 67 67 yes yes Village Transmigrant Individuals 1952 - 1979, 1980 - 2006 Linear Regression Log Regression (7) (8) (9) (10) (11) T.Ind 29.6581*** (11.1668) 7.9138 (9.0708) T.Ind 1 T.Ind 2 NTInd Constant R-squared N Controls 690760.1507*** (122346.1306) 0.1400 311 no -26856917.9599 (20656904.6773) 0.39 67 yes 0.2027*** (0.0208) -23.9726 (16.9966) 25.0529** (12.214) 9.3740*** (3.1078) 10520314.068 11.4786*** (20765541.1957) (0.1425) 0.49 0.22 67 308 yes no (6) (12) 0.1746** (0.0729) -0.0210 (0.0424) 0.1315* (0.0708) 0.0911 (0.0751) -27.2834* -25.6750 (15.4922) (15.3744) 0.59 0.63 67 67 yes yes *** p < 0.01, ** p < 0.05, * p < 0.10 Note: Robust standard errors in parentheses. The signs of control variables that are statistically significant are as expected except for roads and decentralization. Roads showed a negative coefficient which was statistically significant for regressions in columns (2), (4), (8), and (10). Decentralization showed negative and statistically significant coefficients for regressions in columns (5), (6), (11) and (12). The magnitude of the coefficient for decentralization, however, is very small, and is positive when it is not statistically significant. 26 I further analyze the effect of transmigration by dividing transmigrants into newer and older migrant groups and by computing the total number of transmigrants moved to neighboring districts. By dividing transmigrants into older and newer migrant groups, I will be able to examine whether older migrants still cause deforestation. Since they have been in the outer islands longer, older transmigrants (as opposed to newer, not younger) might have integrated with the local society more than the newer transmigrants. Hence, this division of transmigration can possibly proxy for social cohesion. T.Ind 1 and T.Fam 1 are the number of transmigrant individuals and families migrated between 1952 and 1979 (respectively) while T.Ind 2 and T.Fam 2 are the number of transmigrant individuals and families migrated between 1980 and 2006 (respectively). On top of dividing migrants into old and new, I also use the number of neighboring transmigrants to proxy for perceived property rights insecurity. The idea is to compare districts that are absolutely identical in every dimension except that one district have transmigrants migrating into neighboring districts while the other does not. Individuals who witness migrants moving in other neighboring districts should perceive their property rights to be insecure. NTInd and NTFam are the number transmigrant individuals and families moved in districts that share a border with district i for all i’s. Results for this further analysis are shown in columns (3), (6), (9) and (12) in Table 8. Notice that older transmigrants do not statistically significantly affect deforestation but newer transmigrants do. There is also a property rights effect. An additional neighboring transmigrant individuals leads to an increase in deforestation 27 by 9.37 m2 while an additional neighboring transmigrant family leads to an increase in deforestation by 40.45 m2 . To ensure the consistency of my results, I also run regressions with transmigrants divided into 5-year and 10-year groups. Results from these regressions are generally consistent with results from dividing transmigrants into 2 groups. 4.3 Illegal Logging I also estimate equation 3 using Wood Production and Price as a proxies for deforestation. Using this wood dataset, t goes from 1994 to 2007. Moreoever, since it is on a provincial level, I sum up all village transmigrants belonging to the same province and use that as a measure of provincial transmigration. Wood volume is measured in cubic meter m3 and wood price is measured as provincial price of a particular type of wood converted to 2000 USD. Results show that in general an increase in transmigrant families and individuals decreases wood production volume and price. This effect on wood production price is expected (See Table 9). If transmigration causes deforestation, an increase in the number of transmigrants should shift the supply of wood to the right and decrease price. However, a similar decrease in wood price is initially puzzling since one would expect an increase in wood production volume to increase prices. The key point in understanding this effect is the fact that the wood production variable only measures legal wood production. It can be inferred that since wood price decreased, there should be an increase in the general supply of wood. If legal wood supply decreased 28 Table 9: Wood Production Regression Results Dependent Variable: Wood Production Volume or Provincial Price (in USD) T.Fam Constant R-squared N*T Province FE T.Ind Constant R-squared N*T Province FE Linear Regression Wood Volume Wood Price (1) (2) -127.4334*** -0.0741*** (42.2375) (0.0138) 5519353*** 3385.3430*** 0.8233 0.656 239 239 yes yes Linear Regression Wood Volume Wood Price (1) (2) -31.1419** -0.0175*** (11.2341) (0.0030) 5773172*** 3437.8790*** 0.8232 0.6528 239 239 yes yes Log Regression Wood Volume Wood Price (3) (4) -5.9413** -2.987*** (2.1148) (1.1889) 60.8100*** 30.400*** 0.8271 0.7641 239 239 yes yes Log Regression Wood Volume Wood Price (3) (4) -5.9381** 3.5144** (2.4908) (1.372494) 67.5132*** 36.6486*** 0.8208 0.7645 239 239 yes yes *** p < 0.01, ** p < 0.05, * p < 0.10 Note: Robust standard errors, clustered at the province level in parentheses. “T.Fam” stands for transmigrant family. “T.Ind” stands for transmigrant individual. Wood volume is measured in m3 and wood price is in 2000 USD. but the general wood supply increased, it could only mean that the supply of illegal wood increased. Estimating equation 3 using the MODIS dataset divided into forest zones, I further find support that not only does transmigration lead to deforestation, it also increases illegal logging. Table 10 shows that even conservation and protection forests, forest areas that are not supposed to be logged, are negatively affected by increase transmigrants. 29 Table 10: Regression Results By Forest Zone Conversion Conservation Production Protection Others (+) (-) (+) (+) (-) (+) (-) (+)* (+) (+) (+) (+) (-) (+) (-) (+) (+) (+)* (+) (+)* (+) (+) (-) (+) (+) (+) (+) (+)* (+)** (+)* (+)* (+) (-) (+) (+) (-) (+)* (+)** (+)** (+) (+)*** (+) (+)** (+) (+) (+)*** (+) (+)*** (+)* (+)*** (+)* (+)*** (+) (+) (+) (+)* (+) (+)*** (+) (+)*** Long-run Cross Section with Controls (1) T.Fam, Linear (2) T.Fam, Log (3) T.Ind, Linear (4) T.Ind, Log Long-run Cross Section Channels with Controls (1) T.Fam, Linear (T.Fam 2) (2) T.Fam, Linear (NTFam) (3) T.Fam, Log (T.Fam 2) (4) T.Fam, Log (NTFam) Long-run Panel, Province and Time FE (1) T.Fam, Linear (2) T.Fam, Log (3) T.Ind, Linear (4) T.Ind, Log *** p < 0.01, ** p < 0.05, * p < 0.10 Note: Robust standard errors in parentheses. Standard errors for the panel regressions are clustered at the province level. P Dependent variable for the cross section regression is 2008 t=2001 DEFt while the dependent variable for the panel regression is DEFt where t = 2001 to 2008. “(+)” signifies a positive coefficient. “(-)” signifies a negative coefficient. “T.Fam” stands for transmigrant families. “T.Ind” stands for transmigrant individuals. 4.4 Selection Bias Problem There is a concern that certain districts might have been more likely to receive transmigrants than other districts. The same districts might also be more likely to be deforested. To address this concern, I calculate each district’s propensity to receive transmigrants using metrics that government bureaucrats used to make decisions. These metrics include soil quality, the existence of a shore for tidal irrigation, population, poverty and length of roads. Since the height of transmigration happened in the late 1980s, early 1990s, I use variables that measure these metrics around this time period. Looking at districts with similar propensities of getting transmigrants, I regress deforestation on whether or not a district was used as a transmigration settlement or not. Columns (1) and (2) of Table 11 shows the linear and log regression results using propensity score matching. 30 Table 11: PSM and Heckman Correction Results P 2 Dependent Variable: Deforestation ( 2008 t=2001 Deft , m ) Transmigration Constant R-squared N Propensity Score Matching Results Linear Regression Log Regression (1) (2) Heckman Correction Results Linear Regression Log Regression (3) (4) 1,844,254.4298*** (372399.456) 186,548.3871*** 0.14 133 1,812,683.9819*** (392404.4435) 327377.6 2.3837*** (0.3583) 11.16916 265 265 2.6329*** (0.3355) 10.7360*** 0.33 131 *** p < 0.01, ** p < 0.05, * p < 0.10 Note: Robust standard errors in parentheses. The variable “Transmigration” is a dummy: 1 if a district ever had transmigrants and 0 otherwise. Table 11 also shows results from running deforestation on a transmigrantion dummy using Heckman correction. Just like the propensity score matching approach, the selection criteria used to run Heckman correction includes soil quality, the existence of a shore for tidal irrigation, population, poverty and length of roads. Both results from the propensity score matching and Heckman correction show statistically significant coefficients for transmigration. This means that looking at fairly similar districts, districts with transmigrants led to higher deforestation. 5 Conclusion Although there are individuals who have written to the contrary, the general belief has always been that the Indonesian Transmigration Program, a massive governmentsponsored and -incentivized migration program, has led to deforestation in the outer islands of Sumatra, Kalimantan, Sulawesi and West Papua. This paper, to my knowl- 31 edge, is the first to properly empirically investigate whether this is the case. Using Landsat satellite images in the 1990s and provincial and district level transmigration data, I examine the relationship between deforestation and transmigration. Results show that an additional transmigrant family causes 3.41 km2 (equivalent to 716 acres) of forest loss a year. Although this result is robust to changes in specification and the inclusion of district or province fixed effects, the coarseness of the deforestation data makes it difficult to further examine the relationship between deforestation and transmigration. Perhaps a finer deforestation dataset around this time period and a more sophisticated way of analyzing forest cover given the quality of Landsat satellite images could be a worthy future endeavor. This paper also examines the relationship of deforestation and transmigration in the long run. Panel regressions show that an additional transmigrant family causes 11.16 m2 of forest loss a year. This number is significantly and understandably less than the short run effect. Further analysis using cross section regressions show that this persistent long run effect of transmigration on deforestation is due to the disruption of social cohesion and the perception of more insecure property rights. In particular, more socially incohesive districts were more likely to cause deforestation. Individuals who witnessed more transmigrants moved in districts neighboring theirs were also more likely to deforest more. Using wood production volume and provincial price as proxies for deforestation, I find that not only does transmigration lead to deforestation, it also increases illegal logging. Panel regressions with provincial fixed effects show that an additional transmigrant family leads to a decrease in both the volume of legal wood production 32 and the provincial price of wood. 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(2012) (1) (2) (3) (4) (5) ALL 1 12 19 22 23 18 8 26 27 33 11 14 14 17 19 12 9 12 6 11 3 10 10 7 11 7 9 12 11 15 0 10 7 8 10 0 9 10 11 14 0 0 6 7 7 10 11 13 13 14 14 5 14 9 9 9 0 9 11 13 0 8 13 11 13 1 12 11 14 15 10 10 11 11 11 2 11 21 22 24 8 9 11 12 12 3 6 6 6 6 2 1 5 5 5 26 25 21 28 24 11 11 11 11 11 148 190 262 269 300 23 33 19 12 11 15 10 14 7 14 14 13 13 15 11 24 12 6 5 29 11 311 Notes: (1) represents Conversion Forests, (2) represent Conservation Forests, (3) represents Production Forests, (4) represents Protection Forests and (5) represents Other Forests. 41 B Successful Transmigrant Villages Per Province Province Number of Villages Bengkulu Gorontalo Jambi Kalimantan Barat Kalimantan Selatan Kalimantan Tengah Kalimantan Timur Lampung Riau Sulawesi Bara Sulawesi Selatan Sulawesi Tengah Sulawesi Tenggara Sulawesi Utara Sumatera Barat Sumatera Selatan Sumatera Utara 98 48 151 130 107 200 134 121 265 79 59 161 204 26 13 284 46 42 C Number of Transmigrant Families and Individuals from Statistical Yearbooks and Pocketbooks Year Number of Families Number of Persons 1956 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1972 1973 1974 1978 1979 1980 1981 1988 1989 1990 1991 1992 1993 1994 TOTAL 5,765 5,158 6,255 11,439 5,702 5,064 7,692 3,425 13,049 1,148 2,012 3,192 2,269 4,527 11,314 15,679 7,443 25,079 24,486 50,802 80,019 19,397 25,454 67,683 75,250 63,512 199,682 197,480 939,977 24,350 22,659 26,419 46,196 22,075 15,609 32,159 15,222 43,025 4,648 9,566 13,883 10,447 20,365 50,920 62,018 33,483 110,818 106,714 214,393 324,921 0 0 0 0 0 0 0 1,209,890 43 D Year and Source of Provincial Transmigration Data (Statistical Yearbooks and Pocketbooks) Year Source 1956 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1972 1973 1974 1975 1978 1979 1980 1981 1988 1989 1990 1991 1992 1993 1994 Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Badan Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Pusat Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik Statistik (1957) (1958) (1959) (1960) (1961) (1962) (1967) (1967) (1967) (1969) (1971) (1971) (1971) (1971) (1973) (1975) (1976) (1976) (1978) (1980) (1981) (1982) (1994) (1994) (1994) (1994) (1994) (1994) (1995) Notes: No data was available for 1957, 1971, 1976-1977, 1982-1987. 44
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